Importance of Material Coding and Classification in Store Management in Manufacturing Industry

1.0 Introduction

According to Macgrathy (2008) classification and codification of materials are steps in maintaining stores in a systematic way. Materials are classified in such as way that storing, issuing and identifying of materials become easy generally, materials are classified on the basis of their nature. Materials can also be classified on the basis of quality and utility, for example, materials may be classified on the basis of their nature. Materials can also be classified s raw materials, consumable stores, components, spares and tools. Thus classifying materials on different bases such as nature, quality and utility is called classification of materials.

For the purpose of identification and convenience in storage and issue of materials, each item of material is give a distinct name such a process of giving distinct name. such a process to different items of materials is called codification of materials. Good store-keeping requires proper classification either by their nature or by their usage. The former method of classification or classification by the nature of materials is more commonly used. Under this method of classification, the various items of stores are divided into specific groups like construction materials, belting materials consumable stores, spare parts and so on the items are grouped so that each item of stores will be conveniently codified on alphabetical, numerical or alpha-numerical basis and given a distinctive store code number.

1.1 Background of Study

The PZ Plc Aba incorporated for production in 1964, charged with the responsibility of production of household products. As a result of the Nigeria Civil war, the company was forced to shut down in August 1967, and most of the machineries and rehabilitation work commences in March 1971, and May 1971, the company went back into production.

In carrying out this function of production of many materials required. The PZ company having recognizing the function and need for proper care of these materials appointed stores personnel and stores manager, and also established a purchasing unit charge with the responsibility of supplier selection, ordering , progressing, acquisition and producing these materials, whilst the store manager (including his personnel) was charged with the responsibility of storing inspecting and developing system for effective identification coding and classification of the materials if the stock items are given a scientific identification code, a complete catalogues can be assembled so that when a part is required, it is possible to determine it in stock. The stock records themselves will then indicate the exact stores location. The British Standard Institution has done great deal of work in establishing standards for material product and when a standard specification number is quoted what is been referred to.

Even where it is not possible to develop sophistication coding system, or arranged in logical lines will be of great benefit to a business in avoiding errors in ordering, issuing and pricing etc. The store manager of PZ Plc Aba through her grouping of materials has arranged their materials on logical lines for easy identification thereby avoiding errors in locating, ordering, issuing etc of items of stock in the organization. The code appears on all documents relating to the movement and use of materials and are marked against appropriate bin and racks.

As a matter of fact, the store manager recognizes the need for the use of store vocabulary or catalogue. Therefore, the success of any materials control or management of materials highly depends on the system adopted for effective coding and classification of materials stored.

1.2 Statement of the Problem

Although materials coding and classification is considered a yardstick for easy identification, it is faced with some problems.

1. The nature of the coding system chosen her resulted to giving every different code numbers. This lead to the increase in the volume of the stores vocabulary.
2. The problem of inconsistency in classification of materials in the store section. For instance, there is a section of spinning materials which is normally under the spinning stores but recently, it has been transferred to the administrative stores.
3. There is also lack of a section that take adequate care of the organization stores vocabulary.
4. The organization is also faced with the problem of inappropriate classification of materials.

1.3 Aim and Objectives of the Study

The aim of the study is to examine the Importance of Material Coding and Classification in Store Management in Manufacturing Industry. In achieving this aim, the following specific objectives were laid out as follows:

1. To identify the limitation to materials coding and classification with a view of proffering solution to them for the benefit of the organization.
2. To determine the need for the use of effective and efficient coding system.
3. To determine the effect of inconsistency in store, coding and classifications.
4. and lastly, to offer useful suggestions to management towards the application of the various method and techniques of coding and classification of materials.

1.4 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

• Do you think that coding and classification of materials is important in manufacturing companies?
• Has efficient coding and classification method used in PZ Plc Aba?
• What are the problems of coding and classification in PZ Plc Aba?
• What are the solutions to the problem?

1.5 Significance of the Study

The research believes that the project will succeeds in throwing more light on the subject matter.

It will also go a long way in picking the conscience of all who have or assumed responsibilities of materials coding and classification of purchased material in manufacturing industry with particular reference to PZ industries Nigeria Plc Aba. This leads to limiting the traveling times in locating the materials stores, higher productivity and adequate professional recognition in industrial sector.

1.6 Scope of the Study

Materials coding and classification is a wide area of study. But this work will focus attention on the important of effective coding and classification of item as related to PZ Industries Plc, Aba only.

1.7 Limitation of the Study

The writers tends to cover the needs for materials coding and classification in a manufacturing company with particular reference to PZ Industries Plc. Aba, the paper would have one beyond these if not for:

1. Research Biases:

Most respondents although knowing the aim of this research refused to cooperate. The researcher has to waste some time persuading them to answer one question or the other.

2. Financial Constraints:

Due to the hard economic situation enough finance that should have allowed most diversified research wasn't available.

3. Time Constraint:

The researcher combined his class work with research itself. This made the researcher to exercise a very high schedule as he had no transport himself. The problem becomes worse.

4. Transportation:

Transportation problem posed a big treat to the project. The researcher wasted much time for vehicle and may succeed only to get his point of call very late. At time, interviews arranged may be missed and repeated journeys became mandatory.

4. Attitude of Nigeria Research:

The tendency of people (respondents) not to regard questionnaire as important as well as nonchalant attitude of people to research in the country led to some questionnaire not returned. Some that were returned did not comply to instruction of the research questionnaire. This militates adversely on the progress of work, however, the researcher made up these short comings from use of interviews and observations in this organization.

5. Other factors:

Other factors that limited this study were there are scarcity of store management texts by Nigerian authorities in this country this made references in previous works very difficult.

1.8 Definition of Terms

Stores management:

It involved the day to day running of the store. In specific terms stores management is involved in carrying out of operating, designed to accomplish the aims and objectives of the department as determined by the administrative sector. To realize the set objective, store management involved planning, organizing, staffing, directing, controlling and coordinating.

Stores Coding:

Is the identification of stock items by numerals, or letters or by a combination of both and in which the position and value or each digit usually provide particular information about the items identified.

Classification for coding purposes:

Coding could simply involve allocation of number to each item as it arises, but this method makes the classification of items from their code more and more difficult as the number of items involved increases. This difficulty is reduced if we group like items together and devise our items are classified as well as identified the individual items means grouping items into two types or classes.

The complete sequence of operation therefore would be:

1. Identity: What the item, what is deals.
2. Specify: Its description, dimension, tolerance, etc.
3. Classify: To its correct group and subgroup.
4. Code: By allocating group and sub group and item designation.

Colour coding:

This is s system whereby colours are used it identify items held in stock. This type of coding is mainly used in the lumber yards for making timbers and also in oil companies for making different types if pipe and chemicals stored in drums or tanks.

End used coding:

This is a system where by items are arranged and stored according to the user department for all together for casting works are stored together in a designed location and issued only for casting works.

Suppliers code:

This is a system where the supplier's code are used. For one to be able to use this system, he must be well understood otherwise problems could be compounded.

Nature of the items:

This system is widely used by the most companies, with this system items are classified and coded according to their basic nature. Before any coding system is adopted or introduced into the stores, some important 5 favours have to be considered and they include:

1. The type of stock items to be cooled
2. The availability of staff and resources for the identification and updating of stores.
3. The availability of staff and resources for the identification and updating of stores.
4. The mode of operation-whether manual or computerized system of operation.